Beer distributors stay aggressive on ordering to minimize out-of-stock in September

Beer Purchasers’ Index (BPI) for September 2020 rose to 80 from 54 for September 2019, according to the National Beer Wholesalers Association (NBWA). Meanwhile, the “at-risk inventory” index for total beer (inventory at risk of going out-of-code in the next 30 days) has recorded another all-time low reading at 18 for September 2020 from 48 in September 2019.

“This month’s reading remains significantly above historical trends as increased packaged beer sales in the off-premise continue to ‘fill-in’ for lost on-premise and draft beer sales,” says NBWA Chief Economist Lester Jones. “Beer distributors continue to take an aggressive stance in their ordering to minimize out-of-stocks, compensate for lost draft beer volumes and continued on-premise closures.”

BPI is the only forward-looking indicator for distributors to measure expected beer demand. The index surveys beer distributors’ purchases across different segments and compares them to previous years. A reading greater than 50 indicates the segment is expanding, while a reading below 50 indicates the segment is contracting.

Looking across the segments:

• The index for flavored malt beverages/seltzers at 91 remains the strongest of all segments in the survey, with a 12-point increase over the 79 reading in September 2019.
• The index for imports at 65 also remains in expansion territory for September 2020 and now significantly higher than last year’s reading of 51.
• The craft index for September rose above the 50 break-even mark to 55 and is now 12 points higher than the September 2019 reading of 45.
• Across the domestic beer segments, premium lights and regulars continue to post historically high readings in September and continue on a 6-month streak. Premium lights at 74 remain significantly elevated compared to the 36 mark for September 2019. The premium regular segment posted a 60 reading in September 2020 relative to 27 in September 2019.
• The below premium segment at 50 has posted consistently lower readings each month since May but is still significantly higher than September 2019 reading of 31. This is the first sign in the BPI of a return to normal for the industry.
• The cider segment remains in contraction territory, however, slightly higher at 45 in September 2020 from 34 at the same time last year.